LESSON 4

DEFINITION OF BUSINESS RULES

 A business rule defines or constrains some aspect of business and always resolves to either true or false.
It specifically involves terms, facts and rules. 
 Business rules are intended to assert business structure or to control or influence the behavior of the
business.
 Business rules describe the operations, definitions and constraints that apply to an organization.
 Business rules can apply to people, processes, corporate behavior and computing systems in an
organization, and are put in place to help the organization achieve its goals. Even though a system of
strategic processes governs business rules, business rules are not strategic themselves; they are
directive. 

For Example:
 A business rule might state that no credit check is to be performed on return customers.
 Requiring a rental agent to disallow a rental tenant if their credit rating is too low, or requiring
company agents to use a list of preferred suppliers and supply schedules
 A decision-making approval structure for invoice processing where only certain managers can sign
off on invoices totaling a specific amount
 Calculations in which a formula may be used to calculate revenue or expenses
 Policies where an organization requires its employees to work with a preferred list of vendors
 A series of required questions that if an answer is no, a certain vendor is excluded from a particular
partnership opportunity
 Calculations to determine bonus potential and payouts for sales personnel

A business rule may be informal or even unwritten, documenting the rules clearly and making sure
that they don't conflict is a valuable activity.When carefully managed, rules can be used to help the organization
to better achieve goals, remove obstacles to market growth, reduce costly mistakes, improve
communication, comply with legal requirements, and increase customer loyalty.
Business rules can also be applied to software, like computing systems. This software helps business
organize and achieve their goals by using business rules and business logic.

BUSINESS RULES VS STRATEGY

Business rules tell an organization what it can do in detail, while strategy tells it how to focus the
business at a macro level to optimize results. Put differently, a strategy provides high-level direction about what
an organization should do. Business rules provide detailed guidance about how a strategy can be translated to
action.
Business rules exist for an organization whether or not they are ever written down, talked about or
even part of the organization's consciousness. However it is a fairly common practice for organizations to gather
business rules.
Organizations may choose to proactively describe their business practices, producing a database of rules.
While this activity may be beneficial, it may be expensive and time-consuming. For example, they might hire a
consultant to comb through the organization to document and consolidate the various standards and methods
currently in practice.
Gathering business rules is also called rules harvesting or business rule mining. The business analyst or
consultant can extract the rules from IT documentation (like use cases, specifications or system code).
They may also organize workshops and interviews with subject matter experts (commonly abbreviated
as SMEs).
Software technologies designed to capture business rules through analysis of legacy source code or of
actual user behavior can accelerate the rule gathering processing

Business rules are discovered and documented informally during the initial stages of a project. In this
case, the collecting of the business rules is incidental. In addition, business projects, such as the launching of a
new product or the re-engineering of a complex process, might lead to the definition of new business rules. This
practice of incidental, or emergent, business rule gathering is vulnerable to the creation of inconsistent or even
conflicting business rules within different organizational units, or within the same organizational unit over time.
This inconsistency creates problems that can be difficult to find and fix.

Business rules can also be created when necessary for internal and/or external purposes. In order to meet
the business's goals, businesses can come up with their own business rules and self-impose them in order to
meet their standards or if they are trying to comply to external standards. 
Allowing business rules to be documented during the course of business projects is less expensive and
easier to accomplish than the first approach, but if the rules are not collected in a consistent manner, they are not
valuable. In order to teach business people about the best ways to gather and document business rules, experts
in business analysis have created the Business Rules Methodology. This methodology defines a process of
capturing business rules in natural language, in a verifiable and understandable way. This process is not difficult
to learn, can be performed in real-time, and empowers business stakeholders to manage their own business rules
in a consistent manner.

Types of business rules

There are several assertions to be kept in mind when one is trying to define types of business rules:
A structural assertion is where facts are portrayed as the structure of an enterprise and are used to make
decisions. 
Action assertions outline constraints and conditions that control the actions of the business in some sort of way.
A derivation is additional knowledge that stems from original knowledge about the business. 

Keeping these assertions in mind, business rules can be divided into one of three types:
Coordination rules: rules set in place that are a general requirement that has to be met before continuing. The
rules are geared to make sure the company keeps progressing without re-work. 
Qualification/disqualification rules: these rules are used to determine which subjects should be included and
which ones should not. It's basically filtering and preventing wasted time and effort. 
Decision rules: this rule is used when a subject needs to be sent back for more information, approved, or
rejected. 
Categories
According to the white paper by the Business Rules Group, a statement of a business rule falls into one
of four categories:
Definitions of business terms
The most basic element of a business rule is the language used to express it. The very definition of a
term is itself a business rule that describes how people think and talk about things. Thus, defining a term is
establishing a category of business rule. Terms have traditionally been documented in a Glossary or as entities
in a conceptual model.

Facts relating terms to each other

The nature or operating structure of an organization can be described in terms of the facts that relate
terms to each other. To say that a customer can place an order is NOT a business rule , but a fact. Facts can be
documented as natural language sentences or as relationships, attributes, and generalization structures in a
graphical model.

Constraints (also called "action assertions")

Every enterprise constrains behavior in some way, and this is closely related to constraints on what data
may or may not be updated. To prevent a record from being made is, in many cases, to prevent an action from
taking place.

Derivations
Business rules (including laws of nature) define how knowledge in one form may be transformed into
other knowledge, possibly in a different form.
Real world applications and obstacles
Business rules are gathered in these situations:
1. When dictated by law
2. During the business analysis
3. As an ephemeral aid to engineers.